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Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

The following table presents the Company’s assets that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of September 30, 2017 and December 31, 2016 (in thousands):

					Fair Value Measurements Using
	Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
September 30, 2017
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	126,401			$	—			$	126,401			$	—
Obligations of states and political subdivisions	172,526				—				172,526				—
Mortgage-backed securities	315,357				—				315,357				—
Trust preferred securities	2,701				—				—				2,701
Other securities	4,219				175				4,044				—
Total available-for-sale securities	$	621,204			$	175			$	618,328			$	2,701
December 31, 2016
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	136,324			$	—			$	136,324			$	—
Obligations of states and political subdivisions	162,705				—				162,705				—
Mortgage-backed securities	314,991				—				314,991				—
Trust preferred securities	1,652				—				—				1,652
Other securities	4,176				144				4,032				—
Total available-for-sale securities	$	619,848			$	144			$	618,052			$	1,652

Fair Value of Assets Measured on a Recurring Basis Using Significant Unobservable Inputs

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2017 and 2016 is summarized as follows (in thousands):

		Trust Preferred Securities
		Three months ended								Nine months ended
		September 30, 2017				September 30, 2016				September 30, 2017				September 30, 2016
Beginning balance		$	2,424			$	1,746			$	1,652			$	1,906
Transfers into Level 3		—				—				—				—
Transfers out of Level 3		—				—				—				—
Total gains or losses:
Included in net income		—				—				—				—
Included in other comprehensive income (loss)		318				(66		)		1,166				(190		)
Purchases, issuances, sales and settlements:
Purchases		—				—				—				—
Issuances		—				—				—				—
Sales		—				—				—				—
Settlements		(41		)		(19		)		(117		)		(55		)
Ending balance		$	2,701			$	1,661			$	2,701			$	1,661
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date		$	—			$	—			$	—			$	—

Assets Measured at Fair Value on a Nonrecurring Basis

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2017 and December 31, 2016 (in thousands):

	Fair Value Measurements Using
	Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
September 30, 2017
Impaired loans (collateral dependent)	$	6,793			$	—			$	—			$	6,793
Foreclosed assets held for sale	307				—				—				307
December 31, 2016
Impaired loans (collateral dependent)	$	6,938			$	—			$	—			$	6,938
Foreclosed assets held for sale	173				—				—				173

Significant Assumptions Used in Valuation of Level 3 Financial Instruments

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill at June 30, 2017 and December 31, 2016 (in thousands).

September 30, 2017	Fair Value				Valuation Technique		Unobservable Inputs		Range (Weighted Average)
Trust Preferred Securities	$	2,701			Discounted cash flow		Discount rate		13.3%
							Constant prepayment rate (1)		1.3%
							Cumulative projected prepayments		21.9%
							Probability of default		0.6%
							Projected cures given deferral		0.0%
							Loss severity		97.7%
Impaired loans (collateral dependent)	$	6,793			Third party valuations		Discount to reflect realizable value		0	%	-	40%	(	20%	)
Foreclosed assets held for sale	$	307			Third party valuations		Discount to reflect realizable value less estimated selling costs		0	%	-	40%	(	35%	)

December 31, 2016	Fair Value				Valuation Technique		Unobservable Inputs		Range (Weighted Average)
Trust Preferred Securities	$	1,652			Discounted cash flow		Discount rate		13.6%
							Constant prepayment rate (1)		1.3%
							Cumulative projected prepayments		22.4%
							Probability of default		0.5%
							Projected cures given deferral		0.0%
							Loss severity		97.6%
Impaired loans (collateral dependent)	$	6,938			Third party valuations		Discount to reflect realizable value		0	%	-	40%	(	20%	)
Foreclosed assets held for sale	$	173			Third party valuations		Discount to reflect realizable value less estimated selling costs		0	%	-	40%	(	35%	)

(1) Every five years

Carrying Amounts and Estimated Fair Values of Financial Instruments Not Carried at Fair Value

The following tables present estimated fair values of the Company’s financial instruments at September 30, 2017 and December 31, 2016 in accordance with FAS 107-1 and APB 28-1, codified with ASC 805 (in thousands):

	Carrying Amount				Fair Value				Level 1				Level 2				Level 3
September 30, 2017
Financial Assets
Cash and due from banks	$	69,153			$	69,153			$	69,153			$	—			$	—
Federal funds sold	490				490				490				—				—
Certificates of deposit investments	1,685				1,708				—				1,708				—
Available-for-sale securities	621,204				621,204				175				618,328				2,701
Held-to-maturity securities	69,306				69,137				—				69,137				—
Loans held for sale	2,079				2,079				—				2,079				—
Loans net of allowance for loan losses	1,846,894				1,842,343				—				—				1,842,343
Interest receivable	10,876				10,876				—				10,876				—
Federal Reserve Bank stock	5,160				5,160				—				5,160				—
Federal Home Loan Bank stock	3,302				3,302				—				3,302				—
Financial Liabilities
Deposits	$	2,217,477			$	2,217,528			$	—			$	1,897,161			$	320,367
Securities sold under agreements to repurchase	116,360				116,348				—				116,348				—
Interest payable	552				552				—				552				—
Federal Home Loan Bank borrowings	87,052				87,396				—				87,396				—
Other borrowings	31,250				31,250				20,000				11,250				—
Junior subordinated debentures	23,980				17,640				—				17,640				—

	Carrying Amount				Fair Value				Level 1				Level 2				Level 3
December 31, 2016
Financial Assets
Cash and due from banks	$	137,002			$	137,002			$	137,002			$	—			$	—
Federal funds sold	38,900				38,900				38,900				—				—
Certificates of deposit investments	14,643				14,651				—				14,651				—
Available-for-sale securities	619,848				619,848				144				618,052				1,652
Held-to-maturity securities	74,231				73,096				—				73,096				—
Loans held for sale	1,175				1,175				—				1,175				—
Loans net of allowance for loan losses	1,808,064				1,795,764				—				—				1,795,764
Interest receivable	10,553				10,553				—				10,553				—
Federal Reserve Bank stock	3,949				3,949				—				3,949				—
Federal Home Loan Bank stock	4,389				4,389				—				4,389				—
Financial Liabilities
Deposits	$	2,329,887			$	2,331,725			$	—			$	1,976,806			$	354,919
Securities sold under agreements to repurchase	185,763				185,766				—				185,766				—
Interest payable	535				535				—				535				—
Federal Home Loan Bank borrowings	40,094				40,318				—				40,318				—
Other borrowings	18,063				18,063				—				18,063				—
Junior subordinated debentures	23,917				17,068				—				17,068				—

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- Definition

Tabular disclosure of the inputs and valuation techniques used to measure fair value, and a discussion of changes in valuation techniques and related inputs, if any, applied during the period to each separate class of assets, liabilities, and financial instruments classified in shareholders' equity that are measured on a recurring and/or nonrecurring basis.

+ References

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-SubTopic 10
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Tabular disclosure of assets measured at fair value measured on a recurring or nonrecurring basis. Includes, but is not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2.

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Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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